When starting a new business, it’s natural to want to get some help. It’s also natural to want to split things equally between yourself and a partner. However, the 50/50 split (meaning that 50% of the business belongs to you and the other 50% belongs to your partner) is a disaster waiting to happen. The best way to think about it is a person with two equally-sized heads; one head wants to walk one way, the other head wants to walk another. The result is a stalemate and no forward movement. The same can be said of a company with two leaders with equal say on all matters. My advice: figure out who the heart of the business is, then give that person more power to make the final decision.
Related posts:
Bad Business Decision #1: Being a Backseat Designer
Bad Business Decision #2: Not Paying People
August 8th, 2006 at 3:16 am
Try starting a company with three directors, one third share ownership each and one director swaying between the other parties. Beleive me - you don’t want to do that either! I’d definately advise owning 51% plus of your business. And if you don’t - don’t do it.
August 8th, 2006 at 9:48 am
Aha! Thanks for that insight David. I think this shows that a clearly defined leader simplifies things greatly. Although, with 3 parties, I guess you could always put up an issue for a majority-wins vote?